Qualys (QLYS) 7 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to Qualys Fourth Quarter 2023 Investor Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Blair King, Investor Relations. Please go ahead.

Gigi. Thanks, welcome Quarter and Earnings Qualys' to afternoon, XXXX Fourth Call. Good

results today Joo Thakar, CFO. to me are Mi discuss our and Joining CEO; our Sumedh and our Kim, President

today's set our like generally these that and statements the to call statements, in materially could or performance. future Form future forth future that make result remind press I'd Actual obligation forward-looking our as filings relate including started, SEC no cause update with events. or this undertake assumptions to and differ or release and a get XX-Q. will include factors of we you Before materially our these of results from new that our latest financial we as remarks today, events are on results today statements that information XX-K differ based on forward-looking are to and to Any operating we may statements

we present press financial this our release. During today's presentation of press and a to reconciliation And in the of release, non-GAAP A as measures. on and Relations reminder, Investor will measures included are investor remarks, GAAP website. section the call, non-GAAP is prepared both available GAAP

the call with I'd to to like So Sumedh. that, over turn

enterprise-wide which organizational custom AI and solutions remediation solutions, expanded prioritized of welcome, controls and we into compliance. patch compensating by executive to ready platform feedback ] combination and management solution. solutions list impact AI-powered a capabilities, and first-party measure customers and fourth our management risk market. Today, opportunity. FedRAMP other communicating a spend, and The automated lines platform from boards to on upgrade this months our security and the integration for from agents to encouraging. ] amount the technology is and reduction just as with view further year Inclusive XX articulate add to executives growth communicate our orders believe spend. is [ and comprehensive organizations TruRisk eliminating such and security management customers. President that help virtual XXXX initiative the looking helping third-party We C-level remediation risk include announced the we are additional and and was approach innovation new impact. characteristics, open Qualys in environment Qualys' we solutions Blue provide to is our organization's data and able time from unified in guided cybersecurity AI-powered several have risk our space and being just organizations security VMDR container software images business. their eradicate we and data discover and platform agent-less response products provide we now Combined we IT from measurable as meets tourist and production posture for announced organically [ integrated quantification Thank apply and well in on a Biden's strategic from threat remediation from new prioritize new [ risk into comprehensive our The measure eliminate risk softens and secure risk source single everyone, with with outcomes Insights, TruRisk standard mitigation unified focused we a intelligence platform, and with identify multi-cloud results, new detection ROI market SaaS enables and one to feeds the and policy capabilities run we a you, platform XX actionable reintroduced cyber around security the of our native to leaders and as cloud to integrates remediation. over upgrade only ] infrastructure invisible translate prioritization monitor eliminating on analysis comprehensive risk security boundary golf of ] in benefit And our Hexagon workload learning and quarter immediate boundaries our towards to across capabilities sets and vulnerability at enterprise capabilities, CWPP, workflow Qualys also faster to Blair, call security data [ groundbreaking vulnerability agent This in a deployed threat environments strong We SSPM, empowers [ we within and for our product cloud management aggregates cyber magnify risk. optimized and ServiceNow, posture and ] advanced are configuration to and and launched risk. The transform the signals highly introduced of QSC teams deploying updates is unique [ cloud become and last of capabilities time patches insights the space uniquely ] And from of and comprehensive XX development which and solution flexible, we integrated business. in eliminate better quite to cloud orchestrate but measure, security management software advancements of role November, open including industry cloud innovative on our most the history, value, identify embarking and of deep agent-based this leaders compliance their software patching ] security at lower alone, overall environments. patch multiple buying This that that increasingly created gold net external security and source solutions. a of Qualys source broaden integrated protection and on-prem new the risk intelligent extended in [ our introduction our solutions. Continuing CBR technology. operational earnings point within and dashboard most across We signature-based for away virtual industry and detection customers. assessment solutions and cloud in will platform we're with customers in scores management, SaaS CNAPP patterns solutions acquisition enterprise to of [ what differentiation in the cloud measuring, cloud the communicate innovation management, not of relationships and TruRisk for holistically response, call. software on CNAPP to portion level provide cloud market in the and code composition the objectives. environments SaaS scale signals own storage deployed through cyber address Total risk business increasingly relevance partner high in asset non business effectively Cloud the platform based the a unified post derisking of traditional to provide The multi-cloud million powerful this major to is we their cyber believe disruptive risk their and Qualys harness on competitive management actions platform cyber aimed protection, cyber based as on-prem unified as across cloud-native Qualys lake to remediation that the application to undetectable market. are and with extending terms Early cost CISOs own our ] operations our dashboard which shifting of customer

internal technologies VMDR seamless risk new remediation approaches tax others XXXX prioritization an management, for allow on on unauthorized to pleased managed inside are passive standardize that reduce assessment, our map IT environments. and and customers ROI or innovative existing These with to real-time enables immediate the appliance-based approach agents organizations Cloud Agent continuous the turn devices enhancing many obtain announce help I'm cost detection-only visibility with management, to new just cybersecurities in unmanaged our to assets ]. management complexity we for a previously road network of assets [ single service associated of road market. rapidly asset delivers communicating unique cloud more Additionally, OT enables Qualys total assets with into out as comprehensive customers and unknown passive they to center their detect security This the to that sensing. several and to click across trusted cybersecurity capabilities silo to enablement and the lower complexities with eliminate And this platform with ownership along relative asset unknown millions and existing a

now how are QX, for down our the to Turning to experienced a these our a a partners companies will security by of other of VMDR further and and we expanding another the Adding and which competitive provider, in business quarter take couple both to wins, technology existing is capabilities customers the stack. examples customers, XXXX. Key multiple several care XX% steady leading customers global deployed include worldwide. VMDR wins update services, financial health and of manufacturing motion go-to-market new in Qualys use and market I of their of moment Global share consolidate to adoption,

tourist of from figure a platform win. In seven-figure communicate example, Fortune them and mediation to risk business XXX relationship This has high purchasing consolidation risk an list them as Fortune care and management, favorite new as incidents to Cloud value the posture Qualys efficiency part new recommendations critical expanded XXX customer of with in context, Qualys Total Qualys help gain generated hampered newly application incidents. struggled with highly existing adopted in consolidate replace vendors teams. tools QX they organization. and and VMDR, logo modernizing their uniformly Cybersecurity Their Management its asset existing frustrated the front, security web the security organization by legacy with our customer several dispersed scanning, consolidating customer [ and from my across critical with risk well environments On single booking to and a including by factors CNAPP modules by the score Qualys, our media provider IT to its of and The inability Qualys' agencies tourist the to their customer obstructive modules on high highly upsell format introduced standardize another platform which competitive their which team's stack health different platform. contextualize could and was their prioritized a manage tax strategic and one success ] existing was wins increased -- multiple ] [ external this alerts into being enterprise volume Recognizing of juice as different bookings and management solution led on risk X obscure expansion. of

On Both front, These approach and to continue their partners single-agent over the indicated Orange our chose times patch evolving integrated natively leading capabilities. to mediation our simplify to providers, Kudelski global management our VMDR partner ease we expanded reduce and their their two of orchestration, Qualys offerings and significantly customers. have ]. include beyond the solutions CyberDefense managed advance they service due [ for operations platform with competing to ecosystem security

addition, expanded making its which Cloud with now relationship In storage with we platform enterprise available the our Oracle in is OCI, marketplace.

to data marketplace, Microsoft platform. in tourist Azure full to by in security we with our start selected our Defender partnership assessment AI-powered also vulnerability Microsoft, Azure its solutions. into the continuing sunsetting only security Copilot are evolved customers also a and an ingesting VMDR Further with participate integration we'll partnership of with VMDR our capabilities We leveraging provide

now front, customers offering relationship expanded suite region. APAC partner the our management, and the which of remediation asset a we VMDR is with to Ingram its on prioritize our Finally, full workflows cybersecurity in Micro,

highly QX fewer $XXX,XXX result, more vulnerability we security As and our more summary, proposition to ]. In more on to to spending with a agents differentiated consolidate stack the several Qualys platform. like security measures vendor platform. and ago more grew our and as the enabling management Largely value and XXX turn them TruRisk they us Enterprise Qualys from cyber risk XX% much security others to Qualys through [ their with with evidenced more eliminate is communicates transform reduce to or costs, Qualys to wins companies gaps, integrated platform a a them customers resources a in complexity year begin risk customers these just get than brings that using natively as believe and

turn growth first our XXXX. the to Looking quarter call I balance our innovation, further outlook vision into we'll and results ahead the execute XXXX, approach proven for full our quarter Joo and continue and and disruptive with first Mi a go-to-market year, that, advance our over profitability. With will to strategic investments fourth discuss to year

Thanks, Sumedh, and good afternoon.

figures The marketing security adjusted generated year enhance our programs to in XX% the XXXX. model based XX% note I QX technologies position prior strong finish growth step I'd leverage accelerate delivering investments and choice. to non-GAAP period to except otherwise. the efficiency with EBITDA to are Before expectations pleased on line margin growth fees revenue like sales partner year, of enables start, we in financial and the a comparisons demonstrates in in strong unless and to report a all that growth earnings We're in revenue, year with revenues stated and us rates market this and people and long-term targeted are to the motion, trusted further our up as new

Now the direct of our continued from channel results. with to Growth let's quarter Revenues fourth growth million our XX% from versus midpoint in to Direct outpaced partners grew XX% turn channel. guidance. at investment X% $XXX.X at

QX Our XX% has revenue contribution a channel shifted year slightly revenues XX% in year, versus with the making the past over up of ago. mix

domestic continue a outside growth By our XX% in expect [indiscernible], business, trend the was ahead of similar We X%. U.S. which to grew XXXX. of

Looking international XX% roughly and remain and we to revenue to XXXX, our mix at XX%, U.S. respectively. ahead expect

growth metric, manage questions to we note LTM billings, As current for bridging to current related we calculated focus like calculated would through although to on don't or billings revenue this positively growth current timing this subscription multiyear Normalized calculated renewal. for anticipating by large prep this, of billings billings been the current approximately XX%. LTM was impacted early QX calculated of have our invoicing that would for guidance, growth

normal our pleased QX, on stable XXX% basis upsell With from selling land confirming being environment In remained anticipate organizations. IT prioritization customers remain in and a scrutiny budget within down the expansion with are with we and the results. although to improvements XXXX the currency environment in many ongoing Turning for quarter. of the constant new challenging, XXX%, see budgets, to to new business, their expand dollar security net last at we

$XX,XXX by continues spending room from revenues from While customers, customers to or improvement LTM increased with smaller there remain XX%. more for us

in combined XXXX. XX% XXXX, In contribution product basis. new terms made these bookings, XX% bookings of XX% Asset up a Cybersecurity products on increased of of bookings the Management and growth Management to combined Patch total in and of In adoption over resulted

offering. Our integrated our solutions up cloud X% security of bookings XXXX made led by natively total cost CNAPP

Turning up $XX.X million. million, XX% our free a ], to prior the of [ back sales XX% was closing the in representing continued was and $XX.X X.XX last $X.X for $XXX.X we Qualys, the cash cash million to us, Free year. for only the headcount, $XX.X to [ margin and XXXX increased flow XX% EPS QX, full capital to year flow Adjusted in compared to Sales we largely generated EBITDA quarter and a XX% into year compared the expenditures profitability. repurchase marketing of operations was out unchanged, expenses a expenses were XXX,XXX operating Other our to and million. including XXXX representing year QX cash the invest quarter XX% with margin marketing of was XXXX million up X% outstanding on XXX ago. ] by shares. In from $XX.X XX% with million, a fourth for from year. fourth margin

share to we starting share million turn available us repurchase We're in revenues. As the Board announce our repurchases additional that amount that, our million. With program, [ of for an repurchase authorized million program. with of the let pleased XX.X XXX.X the ] to bringing share had total guidance, end XXX quarter, has to remaining

X% XXXX, $XXX For the which full is XX%. million, to year represents our guidance of a revenue million $XXX rate growth to

using For With XX%. of to XXXX, to XX% growth the sunsetting [ Microsoft integration this transitioning $XXX.X XXXX revenues year, rate from to total effective be be cloud the Defender of Microsoft [ a May Defender growth range manage for to includes ] we X. Earlier quarter Microsoft estimated we to able on BYOL Defender users, reduction ] this to be in revenue first $XXX.X these an change, leverage security representing and solutions notified effectively solution will embedded our model. will to guidance their Casino customers retiring cloud were that for X% in [ of workloads. pullet million, for Qualys our million container This risk ] and expect

revenues, will to for our the it to Although have to revenue shift Normalized year long-term X% XXXX value for this estimated would negative the been guidance. XX%. Shifting to strategic key full result in short-term is guidance consumers. profitability be to a believe delivering we change, impact to

the to flow implying XX% low XXs XXXX, operating in For full increase year to the increase EBITDA in cash margin XXXX in investments margin the approximately be XX% expect in to free and mid-XXs. we similar expenses in

expect be of the $X.XX. range $X.XX to year in EPS We full to

we expect to the EPS For $X.XX of billion. quarter in range XXXX, to be of first the $X.XX

Our are range $X range the and to to unit $XX first we our driving the to at supporting expanding million to while our marketing in more in planned to $X enhancing and a initiatives million XXXX capital for million of investments sales $XX million. In on specific partner product plan maintaining quarter our economics. expected pipeline XXXX, in aimed disciplined align be focus of XXXX to expenditures program, of federal and vertical approach the

in as people marketing G&A. related modest revenue, to ] to increases more functions well we an and in and expect prioritize percentage [ engineering support a with tens investments of increase as As in sales

drive and will balancing growth while and we a environment, to delivered to healthy returns environment. customer and line share sales and believe a wake long-term of response more wallet industry-leading in in growth, conclusion, be on productivity we focus challenging success a macroeconomic and As profitability. In profitability selling in in XXXX, we we top a marketing our stable able the increase new,

We announced Quality innovation an continue TruRisk new to lead and platform. for road the Enterprise product with exciting map

and long confident answer would happy questions. deliver We ability I our opportunity in maximizing value. With term remain of to your any shareholder be our growth to and are Sumedh, to on that, committed

question first Tilton Instructions] [Operator the Josh Wolfe line of Our Research. comes from from

two want to in sneak here. just I

could highlighted The the strong again, early, around early detail prepared us billings kind growth understand of first the able to it. know more remarks, little the in But be one-off really a is the And still it's quarter. should maybe you I bit one-off. rec renewal? just ] on as in give that I you but rev you [ then

it, So -- revenue guidance had been would renewal way QX? this is lower the that or happened growth think been would in early about to have revenue have not

in typically, booked when of renewal, it's an earlier. early So we it early book with combined And terms renewals, a upsell. we

impact closed earlier doesn't because it So the period the actually in deal rev-rec a earlier. have we

supposed were amount an closed the it entire deal impacted and piece, X combined wanted if an total with even was because because on into we invoice on recognition we customer upsell the So the December renewed revenue have the billings because revenue renewal, to renewal for January the renew as the renewal preferred, early X, it the on on an customer though wouldn't QX. December an have example, what to would had and that early was impact X that's the the

contribution Could you long-term appreciate guess on really I to this being maybe the dive impact, a is partnership of one and guys revenue. short-term Qualys? but positive envision my And just just is you a clear then level Microsoft on deeper more for clarity the the obviously, how negative follow-up the

Josh. a question, That's great

that bit management, inventory you VM at evolved an out threat certificate which years ability a multiple few the additional with, and if detection it and as and took VM came I has VMDR we as evolved other think last patch to scan-only including over the what into systems. look quite capabilities, well giving

in VM modern my what set the mind And for end-to-end so that standard needs really, be. to VMDR

with relationship the leveraging. with legacy so the And that were Microsoft, what integration VM the scan-only they particular -- was

allows work to us CSAM, better VMDR out to vulnerability the security VMDR Azure that -- but have provide course, we BYOL management, total full them and so only us to also a integrity the full than on CV upsell environment. moving VMDR patch to sell cloud And conversations with to bring which with the out ability them management, monitoring, significantly allows of have to to not it is the list customers with with evolving is because license, us just integrated into allows license then cloud getting And file the today full there.

longer platform. have additional talk to more over that, so to it -- help talk risk about these much gives as access especially upsells the we enterprise their with overall see term, a us of unified more about to them Qualys. the And customers feel, and we to more view the opportunities of and posture, And them TruRisk capabilities

And has a working partnership provides. that data well defender tourist for Copilot Microsoft as platform are of evolved, type taking new the pushing our we a so quality, that to into trying on insights as different we will be as

And integrated that embed experience embedded and does have comes still gives just BYOL to Qualys become so ability that don't to. the licensing access agent, we the an not Qualys sort the really thing to of that and then the

William comes Ho from question from Jonathan next the of line Blair. Our

the terms you opportunities what those new magnitude make leadership investments, that and got understand specific investments? marketing, help sales just to can you've In maybe you're the of are in your and some that the us in of investments seeing of given place, sales those here

looking The line way investment relatively XXXX. in the had with is in we XXXX what at we're in

XX% on we've approximately to XXXX, was is we're what marketing that XXXX, kind employee given with and have as had first. then, in functions driven sales be only in that, that for XX%. and repeat count marketing it sales particular to especially well grown investment increased support focus reps going sales investment and that as it Primarily So year. other on the quota-carrying our by sales head with associated count marketing we said be we an by managers and sales by will a especially back our the increased hiring looking and of increasing focus with partner the marketing, XXXX. channel We by XX% back This in

generating partner as make enablement to that's well like Additional enablement. investment to related shows, activities, is marketing, that sales as including anything plan trade and we events pipeline

Yes, about enterprise we're the seeing CNAPP excited and of up. what we're kind pretty on Total with response our with then TruRisk platform Cloud solution coming

pretty with not I not really logos what so to And should with say. and in for or coming interested encouraged that us are seeing new VMDR, we're solution, the cloud VMDR security just

going head our around of And into cloud so we're look this we platform. also and 'XX in us in count solution marketing the security at invest invest growth sales for to as way that the to sort more to marketing well for our addition year as

question next Canaccord Genuity. Our from the Walkley line from comes Mike of

Daniel Mike. on It's for

some So sort on called additional and in give from coming with out the color us remarks, the seeing partners is Dino? prepared you're I your Can you the expectations this channel. of hiring following of what guess, more of, you how channel progressing revenue shifting

Yes. board. come We're Dino having on happy pretty with

in channels, an closely in of really SVP We us. also with hired working QX who's

some phase seeing Kudelski also to in additional partners. of you CyberDefense invest next are the to And see our with out the that XXXX that, planning mix continue of as partner our Orange with partnerships it's or into we we so these are by couple encouraged going take part that we're our making, as direct, partner we versus taking There's on additional well. like program that a And to solution XXXX, in are looking patch as we whether of management, to are market. months to it as with of roll

hiring well by partners some and as are product roles the partner-focused sort overall, seeing So well. of internally also having as that encouraged marketing And investing we're making. as our with contribution they management conversations in we're partner-focused the

We locals. that good really work with ecosystem, with for on most our of pipeline them help to global plan generate us focusing including have invest of kind partners to net our net comprehensive our generation partner and a and new on working with year this

maybe And just think year just or How Should evenly? as for more be in follow-up, and cost back-end a the the Mi. anticipate marketing for we timing of step-up we investments. loaded potential sales about the quick sort of progress to kind maybe should increased throughout Joo the

heavier first think the is you throughout the but entire the half. second more will year, could in what than I assume be half it evenly progress

Our Stephens. comes next Colley of from line question from Brian the

you source could is your space, you becoming today, biggest CNAPP the of kind CNAPP what the not what competitive new VMDR rather that look So view talk rates whether about you see with in your win or in lands future? in landing differentiation of space than like as a just

Total customers -- that is biggest question. is think that With I Great differentiator Cloud, deploy. with our the right we CNAPP solution infrastructure see now the only that cloud not the

not the environments have. a the give full these of are they while security cloud-only do perspective they them risk solutions, so that cloud And

if admin compromise cloud. lead vulnerabilities is laptop can compromise lead the cloud and As access risk has to then an on of a can in environment a that a certain employee, and particular example, that that laptop a configuration to

recently do customers cloud their ability in to different really comprehensive what this very across but not today, risk just give together SSPM to also we our calling so now something uniquely that we've recently the a right and -- them And CSAM see it, our it's of non-cloud is environment. just solution environments too holistic launched additional of released cetera because is security the in responsible see should win out and our requires et sort of which risk, early are terms saw, But if components concept more they of is excited that really cloud of SaaS to tie environments, score updates want hosted as now [ Management introducing about. and cloud early is now of part view data that Portion to And with interesting because that. cloud in for we you also rates, that ] SEC different

cloud security at look becomes your just holistically, where your to of about more being own you your providers SaaS public so look And important all environment, storing configuration at also but able it it are is not that cloud you data. when

not are that, of solution cloud but a solution, numbers, there. And new net security total first-time in in excited just what small with because have more so us, and very really on interest out to the security buying buyers solution seeing right coming we it's cloud now, solution. comprehensive we're to only directly or seeing we security, also from cloud are pretty coming logos early the cloud still And believe which the solutions the VMDR compared we

at this And kind so where more security to encouraging. pipeline looking look I and cloud one and And and forward invest on-prem, only our small which look, to and non-cloud can like look cloud all generate go definitely gives a you more in at comprehensive you solution, view a say, year cloud view. or kinds more only security to in that's of look of solution assets different Qualys, does together that's a opportunities which

beyond for just term, what I'm And XXXX. you XXXX, of kind One see if again or model kind maybe as also you for if of or beyond you Joo in -- start longer XXs for your to other expectations leverage margins the EBITDA year. Mi. gross in margins margins curious really if are the for low opportunities re-expanding new view just normal view this

Yes.

a EBITDA margin at look if said margin, we our XXXX -- what I In you we terms before take XX%. was was mean of up the EBITDA

ahead. light back to for that, the now reinvest to obviously, going right there's room us into us changes the clear was we're in through that business opportunities and of it So

marketing sense our that really an I For think to a up of really would model a area, would our the that high to is an work we with trade make an but change new and as margin say that term, appropriate [ ROI in opportunity us XXXX, in that and out investment is and where the planned there targets. this difficult think ramp for because to catch the in us ] had for to some investment more reset earlier have it to we of growth, XXXX. Longer think too there's on that we guide sales investments continue believe if little we we it's that

comes from question Securities. line Trevor the Walsh from Citizens JMP next Our of

a what -- And seeing then from couple kind how level, we're within just can a VMDR, a on as I have just Sumedh, I perspective a high on of you. answer depending budget I you out broadly you maybe around starting real have just for security? are can. XXXX, follow-up if

question? Can the the part of I get second

part, play? of sort are of a guess, this So the XX% what's if wondering, internal I quarter I'm the based VMDR those around provide had for? question, last there things good striving on you more seeing your to makes or think, it it limitations sense. Just the I second of fairly in if to is it of type you how -- deck. and the into that more And kind just budget push view rate good of even coming curious year the competitive just kind visibility throughout expectation, year. around of you [ pull ] and where trended, past just it for are with what's budgets, and kind like what that you're kind investor in of together, penetration the fuel first is is of part constrained

really are time amount is yes, change a we the even of do or the POC big and seeing for size of to difference. of cetera. of will of terms Really after they customers budget or not the So sort purchase compared not much start a they make actually POC, POC the in a to a the it do or timing of when purchase a the of et the initial seeing taking

close with for the QX, started think able be increase 'XX couple customers us to that cybersecurity have a major able in as while projects -- they we close investment the translating deal, are investment. the and saw into any to necessarily I actually of who a being that not

land sort bit that of think the and sense I more budget where not I middle that optimistic in taken sense they the there's year some have of is with their stability this idea little will now more be of happened in the kind a away of that the of an customers.

think few way quarters. the from clear in we I direction what the there have so is I in last no seen change in see And

customer We deals. just of the the the on POCs like focus the able to better, size continuing it's to think listen I right and execution, improving size close our way our that. being right

those leverage think we are really we point customers focus asset It do additional of Cloud a Qualys is. existing find talk solutions? turned a Cybersecurity as now excited where agent In on where any about sort additional VMDR terms to that and now who can and -- deployed. VMDR, can happy are about work that of immediately for are customers reached I listener the have the management, it have network those those introduced penetration, ability Agent how we kind they our the of a this continued And I'm very with management, inventory. patch you VMDR our that's a with not on part devices is on saw, of is deployments be lot is super will we why focus we see into where growth. Qualys that communicating and any How we upsells incremental But agent-based

into a now assets not the immediately access. grow to of and of new with to number add so find umbrella, sort that, that the that the now brought can can And so are customer know so that leverage that And Qualys about did has agent assets they Qualys subscription they say. they immediate into

Management, to to et are slow for legacy penetration this sort VMDR us of for focus while really cetera, us. customers space, sort of of and continue expect Patch we CNAPP coming that and VMDR customers to have to VM-only convert to customers around continue innovating sort we we on VMDR so those to And into those opportunities continue always with work customers are encouraging

next Our Markets. of the Loop Yun Capital from Kim comes from question line

you like over VMDR past steady. steady the quarters. Sumedh, said, just adoption Agent here several to has deployment seems been Cloud be

the drive that the new have am incremental you feel your you to sales and jump that management, upside You killer are hoping assuming marketing investments well. management a and new doing the do know do to start better. guide? consistently for feel Do have cybersecurity you guidance I need but you I go-to-market growth? solution could year, product Or patch another you to that motion

Qualys, no we that. customers we at align work I'm our with continue to lack our that right? So innovate products go-to-market sure with of seeing and and make

large Cybersecurity are to with think and display there that asset out our management, are vendors Cloud Patch well continuing getting that multiple we I do are and look, solution some over so to of we about with customers' are that the generating Management ability And there. response quarters, CNAPP opportunity cloud-only the pretty excited Total

that also, So forward that's cetera, in of investments to an end TruRisk from at mentioned, area QSC. our I do launched the looking generate last as that this et more year, the so platform opportunities I'm we -- can upside perspective. But to we marketing, at more year

that now beyond so actually is product going Qualys. And just

module that, ability is module. on scanning the just at And that. us that as for focus add have so from which opportunity than in other to sources security Qualys well get et business then not only code context one score cetera, going customer that modules ingest of that by data third-party one and the meaningful solutions, go charge go to VM to But solutions the cloud having like value competing a risk going additional us other is solutions entire to a help getting gives in means ingest rather data because and also to data adding they our to and from it view solutions, look additional multiple getting from they taking to multiple as analytical customers we're from unified their

launch be are will to an our to this because is, not day, willing year able ] And so something we counts like adopting money and risk of end of area finding at platform, more to that year, looking [ CFO, of not the to executives continue to I'm and super but are and Board I'm the TruRisk and down. how my really bring articulate fine, customers about risk really rest dashboards that as much get what spend that articulate and CSOs the the the to to through all the we to my we're more I'm excited that's that that forward next to saying like my able that I'm

about on excited things nuclear I a so that. TruRisk think I think platform. And enterprise and about I'm you super talk product

On with Azure you hyperscalers increasing marketplace your general, app store in offerings? or and getting traction are

are directly -- go customers mean, we that agents of Azure Azure we don't look, our already. we is the have already have in the of through that Azure millions have marketplace, the On Like marketplace. a running BYOL I enterprise and today that Qualys lot is leverage through one, enterprise in customers who

BYOL other holistic a our is for But amount across good because coming to now using looking the platforms, think laptops, of than enterprise goes for a clouds, channel us multiple I potentially they are to us. cetera. customers so are And us one more Azure et already that, that get solution customers coming on-prem to

it's how early to evolves right So say channel we'll that now. more, to too see but continue

do And quick, you And this quarter? real the in see then any into Mi, any that trend how Joo ASP year? insight metric trending

XXXX. digits, continue growing kind to double we to The of side deal it by and so expect is average

Our next Bergstrom Capital RBC from Markets. the from comes Dan question of line

for Matt Hedberg. It's Dan Bergstrom

you've more looking earnings like remarks you the the Fortune in So called looks materials, had couple incremental XXX, that in XXX the end of it at wins the Global product? it adoption of I can help nice Fortune traction Partners? guess out at a that us over following of XXXX. and prepared the a a years consistent what XXXX maybe you some upper Was drove penetration, couple kind Reach? of with incremental market? of

solving really all, does problems. think but complex terms would well of enterprise combination on generally the say I a that Qualys I of side in it's

VM additional modules I has buyers buy outcome these drive of at there But that product that patch to think sort a upsell. been pushback and Qualys Management hesitation seeing vendor, on beginning. as definitely So there now our ] of right? XX additional a that the and to has at in other our have Asset last customers matured, well, so going the patches Cybersecurity helping is of deployed XX adoption the -- management having million VM conversations the a from patch really seeing matured, was agents customers by was focus with say, those that months, [ each seeing and management the And lot beginning

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line from Piper Aiden ] Sandler. of [ comes next the Our question Perry from

if made to U.S. with XX-XX sales and future? made could Rob on on [ on the foreign you Owens. the is upon sales Can ask comments foreign you keep process just Aiden the the the for mix This in the comments touch to thought geographically. mix and I wanted ] around elaborate investments

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expect So growth continue kind is. the of we to as

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why we that's the so And guidance. gave

approximately be to expect similar XX-XX for our XXXX We it forward plan going based on investment

Our Kothari next the Shrenik comes from line from of Baird. question

the CSOs highlighted it's these getting platform with Sumedh, budgets the monitor ROI. tighter with and TruRisk you how to under aligning the priorities the customer

course, and positive the early feedback pretty the of said kind So you potential. is of underscores platform's

or But started others dashboard kind to least such Now out who you monetizing kind stand-alone planning there up one of a potentially as SKUs you high-level kind of can So -- or mentioned that's about payment well. as quick modules. capitalizing of have consider? are monetize are multiple that there of the the rolling I follow-up that considering have that's potential in model Is strength. demand given at

other solutions? are different capabilities that stand integrating mean alone You solutions together,

of monetizable kind a becoming standalone itself at SKU point? in dashboard the some And Yes.

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consolidating dashboard is to customers sort Qualys. product are our see customers But stand-alone working have over first see, understand that. with We already the I that advantage the of is

then So solutions to buying other into data the from solution itself solution instead and them. operational that Qualys Qualys challenge and is pull for dashboarding handling of another

that or that the the customer onto of elimination into they to platform. help is issues actually those none directly find those The getting second do fix solutions thing

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also these talked and whole management fit for a modules ] not can mitigation. And help about by because will Qualys TruRisk a eliminate them a upsell fact, from can changes now deploy in we the the TruRisk are the becomes also additional able becomes So on especially this actually very with I is dashboard options you deploy [ itself then oh, the try patching things that be to other zero patch day. enabler mitigation the there providing people want the have deployed. patch fix to patch, get make do and to leveraging resistance to be asset some exciting And of you don't the to that, They fix to in customer we because from element Qualys. some that sometimes but that require

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Mi. a And just very quickly, follow-up Joo for

about channel -- XX% to So direct sales, the the you channel to growth far mentioned outpacing Again, direct compared with X%. product going the sales. partners is a

year color Or you kind Sorry right asked So margin is guys that with? mix end year? around overall already guidance into kind trajectory are and can margin somebody the And for questions. is assumption? essentially provide factored the different the some if of consuming the you of the that a being to how

problem. no Yes,

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an of look mix, didn't approximately and at trended If like right, much EBITDA impact up it a ending revenues, as look up our partners see our on our you the make margin and that's if gross to can was XX% channel XX% well, It kind of really our XX%. to used you And XXXX take at of margin. a XX%, you take XX%, year have going to or percentage to think that the QX, XX% up XX% don't it step margins. partner why to our had -- year percentage XX% it from it will tied And impact mix not slowly we two, at for the will really currently it's the think for XXXX. increase from that's that a sitting a being be to we maybe meaningful continue with total

question line JPMorgan. Essex Brian next comes from of from Our the

the I are question is for demand SecOps seeing mean security. set and -- and we're segments the me growth of across guess, I around quite the two Sumedh, a industry. basically that lot for cloud

platform? management? So particularly of leading of strategy B, the adjust different to risk a And way is I then strategy and and an a kind management demand with based if some maybe And security your what question with might then seems landing SecOps emerging a just lead there and what wondering there's seems expanding of bit features those to capture -- to with Agent Cloud risk the with on to to guess if sale then approach management. be strategy the segments, into risk shifting any as any the risk focus cloud part some a functionality management robust that cloud with cross-selling be on headwinds pretty to be overall security, a opposed of than that in

question. Great

to fairly that's that have just So numbers, cloud a us quite are that not with And we what see solution asked, It's robust couple mentioned our coming that business net to finding new quarters is agents. last the interest the you we're but I security. cloud of in that with now. to the again, smaller we question pleased, -- in

Hexagon, now gives us capability Blue Malware have [ built well. We which we as some CSPM in, acquired ] have

cloud of cycle, a our smaller finding comfortable our and where as for pitching we're SMB actually so that And with well there segment POC solution in the sellers lot SME, POCs are providing kind a security cetera. et is the even

for So that's encouraging us.

that's part cloud are for at looking is gen our investment specific like I us and just why, do demand not to are marketing of security this year, so to to the looking the security sales who reason VMDR directly we piece. bring people said, And cloud

security-only then using lot those customers end so in security, much cloud of comprehensive in the are big a solutions, that management. anyway, top vendors cloud can Qualys vulnerability have And Agent cloud who Cloud better these look, that, a up say, those for looking we for

have [ consoles they and And ] so then of two those to leave they all have together.

good that so non-cloud providing our providing cloud where the we're all on environment, kind a and we're a environment, is enablement really on today, to is single a the view GTM, And providing -- of the see from launch but Cloud area our where with way differentiator in a normally CSO OXXX does sales that about package have any [ enablement team work continuing X.X which solution of with risk capability, but concerned perspective and configuration one with a today. is an and to us of big in the not looking, ] SaaS

so is and that our in to your single access And MFA same into say. Or the maybe is fine, but well that combine to OXXX without view bucket. risk solution, we cloud has your SX bucket a as disabled user user

And so you risk. have now a

now cloud 'XX cloud-specific of be see will in we our early something gen are right do for investing we doing So be new believe and will part strategy. that adoption demand the as for we net demand to encouraged customers, total that of

to these VMDR some for thoughts outside we And so risk maybe a sense maybe metrics core, track guess, of the maybe emerging for traction. maybe Joo whether net it's new of or can the providing based percentage security, Any cloud business of I quick of management DR, on attributable segments? to some a follow-up Mi. get emerging segments the Just like a suite, DR

think good more metrics guidance. to always Yes. to We'll sure we that internally That's as and we it and disclose point. about a provide clarity do, relevant make

of line Our next Morgan the Hamza from comes Fodderwala question from Stanley.

going they're I Any a the forward? customer front. as the around a quality Microsoft on relationship. comment customer I understand clarification just commitment well around as partner a just there Microsoft had as customer one to

really a They used Microsoft. with are Qualys. relationship good They us. have We with partner a internally

they working and goals and they're two [ The ] with that and the sure looking those solution. team looking their they have get is there, make they completely different the I out very is relationship team on different that different us. think have are to internal at teams, is the good solution piece best

with them. We work continue to

revenue. Azure, well as of of this at within single sort combined the digits their with a usage of internal so piece the partner Qualys the point, as percentage as low And

point, continue change really we to with or seen we while so what expand no them. opportunity from heard. at And to At there look this is have

you. no At time, this are Thank you conference there participating. questions. further Thank for concludes This today's call.

You Goodbye. disconnect now may